A Central Bank Digital Currency (CBDC) pilot program in Australia has received more than 140 use case proposals from the finance industry, but the Reserve Bank of Australia (RBA) warns that it could displace the Australian dollar and result in people avoiding commercial banks entirely.
The RBA released a
However, the Assistant Governor suggests CBDCs could also provide Australians with many benefits, such as privacy benefits — arguing that the central bank has no incentive to use personal data which can be exploited by private organizations — and could help safeguard monetary sovereignty that may be lost if a stablecoin or foreign CBDC fills a domestic vacuum.
He also points to the potential for offline transactions to increase the resilience of existing payment systems, in addition to increased efficiency and cost reductions for end-users.
Jones finished the speech by adding that Australians should be confident the Reserve Bank will continue to issue banknotes “for as long as they place value on them as a public good.”
Critics are often concerned that the introduction of CBDCs will end with banknotes being phased out however, a fear which is given credence by Nigeria’s move to further limit cash withdrawals on Dec. 6 following the issuance of the eNaira.
